State of New York

Office of the Inspector General

Metropolitan Transportation Authority
One Penn Plaza, 11th Floor, Suite 1110
New York, NY 10119
212-878-0000
Carol)^! Pokomy
Inspector General
September 26, 2019

Mr. Phillip Eng

President
MTA Long Island Rail Road
Jamaica Station Building
93-02 Sutphin Blvd., 3^'* Floor
Jamaica, NY 11435

Re: Weak Time and Attendance

Practices in LIRR Engineering’s
Structures Division - Final
MTA/OIG #2019-11
Dear Mr. Eng;

The Office of the Metropolitan Transportation Authority (MTA) Inspector General (OIG) has
completed a review of time and attendance practices of Structures Division employees (also
referred to as Buildings and Bridges or B&B) of the MTA Long Island Rail Road’s (LIRR)
Engineering Department (Engineering). Our review was conducted as a result of an OIG
investigation which found that B&B Foreman Raymond Murphy abused time and falsified time
records (OIG Report #2018-48). Subsequently, in December 2018, we issued an interim report
(OIG Report #2018-62) because our findings regarding the claiming and documentation of travel
time in B&B required immediate managerial attention and corrective action. The present report
identifies additional critical issues about the lack of management awareness and accountability
for travel time claims, a lack of supervision over employees working overtime, insufficient
management accountability for overtime shifts, and inadequate enforcement of timekeeping
procedures.

B&B is responsible for the design, inspection, construction, maintenance, and rehabilitation of
line structures throughout the LIRR system (e.g. station platforms, bridges, facilities). The
department has over 250 employees, including mechanics, foremen, assistant supervisors,
supervisors, and managers. Four of the B&B foremen are also qualified as Track Car Pilots
(Pilots), who support the work of LIRR and third-party contraetors by operating hi-rail
equipment onto and off of the LIRR’s right-of-way. The foremen typically perform this piloting
work during overtime shifts. In 2018, these four B&B foremen received a total of $659,129 in
overtime pay.’ We reviewed these four employees’ time and attendance records for the three-
month period of April-June 2018, as well as the supervisory verification and approval of the
reported time. Our review identified inaccuracies in the employees’ reported time and the lack
of management oversight. Our specific findings, which appear below, together with additional

Overtime pay rates include both one and one-half times and two times the regular straight-time rate.
Phillip Eng
Re: MTA/OIG #2019-11
August 7, 2019
Page 2

review of other B&B employees’ payroll records, indicate the improper reporting of time and
inadequate management oversight are widespread practices in the B&B Division.

In response to our preliminary report recommendations, you provided my office with a written
response on August 2, 2019. ^ In that response you outline the steps LIRR is taking to strengthen
its time and attendance practices, including the installation of biometric clocks to record
employee start and end times. However, on the broader question of how LIRR plans to interpret
travel time rules, you indicated that “We have engaged the expertise of an independent third-
party firm with subject matter expertise to review the issue and provide guidance to LIRR
executive management in support of next steps.” The letter also includes a committment to
update the OIG on the actions taken regarding time and attendanee eontrols in 90 days.

FINDINGS

A. Engineering’s Oversight of B&B Time and Attendance is Inadequate

In 2004, Engineering began to process employees’ payable hours using the Kronos timekeeping
system.^ However, it continues to use a manual paper timesheet ealled the Daily Labor Sheet
(Labor Sheet) for reporting employees’ time and attendanee. Engineering management has
issued—and periodically updated—departmental guidelines on the reporting of employees’ time
and attendance, with the most recent revision issued in June 2015. Generally, employees are
assigned to work in gangs, and each gang is supervised by a foreman. The guidelines direct
B&B foremen to report the time worked each day for employees under their supervision, using
the Labor Sheet. The foreman signs the doeuments and then submits them to the respective
B&B supervisor for approval. Onee the supervisor approves the Labor Sheets, they are
forwarded to Engineering’s Payroll Unit (Engineering Payroll) for processing.

Regarding overtime assignments, B&B supervisors or assistant supervisors assign overtime work
through a process known as canvassing, in which notices of available overtime work are sent to
eligible B&B employees. Once the employees respond with their interest in working one or
more overtime shifts, the supervisor produces a final overtime assignment list.

1. Supervisors Do Not Review Daily Labor Sheets for Accuracy

In our review of B&B work records, we found that the final overtime assignment lists were not
always accurate. Specifically, we identified cases in which:

In an effort to provide clarification we updated the recommendations in this report on July 11, 2019 to be more
explicit regarding our expectations for agency action. The initial version was sent on May 16, 2019.
3
The Kronos system was upgraded in 2015 and subsequently called the Corporate Time and Attendance
Management System (CTAMS).
Phillip Eng
Re: MTAyOIG #2019-11
August 7, 2019
Page 3

• Employees claimed to have worked the overtime, but were not included on the final
overtime assignment list.
• The hours reported on Labor Sheets did not match the hours assigned for the shift(s).
• Time records showed that employees worked shifts that differed from the shifts in the
assignment list without any explanations for the change.
Our analysis also revealed that the B&B foremen’s hours—especially the overtime hours
claimed on their Labor Sheets—^were approved, processed, and paid without verification by their
supervisors or by Engineering Payroll. We identified the likely causes of this inadequate
oversight: first, as discussed below—^Engineering did not maintain reliable records documenting
the actual dates, times, and locations of the employees’ overtime work. And second, of overtime
assignment lists. Engineering Payroll did not receive a copy of overtime assignment lists -
despite their shortcomings—^which made it impossible for Engineering Payroll to reconcile the
hours on the Labor Sheets prior to processing them for payment.

While it is the responsibility of Engineering Payroll to process the Labor Sheets for all
Engineering employees, Payroll staff members do not verify that the information on the Labor
Sheets is accurate. When we asked the Assistant Chief Officer (ACO) who oversees
Engineering Payroll about this proeess, the ACO informed us that Payroll staff members assume
the information on the Labor Sheets is correct because the employees’ foremen and their
supervisors must approve the Labor Sheets prior to submitting them for processing. However,
we foimd this assumption to be unfounded: no meaningful verification or quality control of any
kind occurs before Engineering Payroll receives the Labor Sheets.

2. Engineering Lacks Reliable Records to Document Employees ’ Work Dates, Times, and
Locations

We learned that Engineering has not established a method for B&B’s field employees to record
their actual arrival and departure times for either regular or overtime shifts, which could be
eompletely different than the times the foremen write on their Labor Sheets. In 2016,
Engineering purchased more than 100 biometric clocks that use fingerprint identification to
record an employee’s time in and time out. Although Engineering installed some clocks at its
facilities, management decided not to fully implement the technology and gave the clocks to
LIRR’s Maintenance of Equipment Department. Engineering officials stated three concerns in
justifying this decision: 1) the union objected to Engineering’s plan to install the time clocks; 2)
because B&B employees often report to multiple work sites each day, to install the clocks in
appropriate locations and capture employees’ time would be challenging; and 3) Engineering
Pa)TOll does not have sufficient personnel to monitor employees’ clocking in and out at the
assigned location(s) and to verify that the hours reported on the Labor Sheets match the time-
clock entries.
Phillip Eng
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August 7, 2019
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While it is desirable for management and the union to work cooperatively on labor issues, we
believe that the union’s objection is not a sound reason for rejecting this useful time and
attendance monitoring tool. Further, as discussed below, we find that the latter two justifications
are not fully supported by the MTA’s own experience. Employees’ movements to different work
locations throughout their workday should have no impact on the use of biometric clocks to
capture their shift start and end times, especially given that the MTA is already successfully
using biometric clocks elsewhere. Regarding Engineering’s claim of insufficient payroll
staffing, other MTA agencies and LIRR operating departments have been processing time-clock
and other labor related data with similar staffing levels.

For comparative purposes, we met with officials in Metro-North Railroad’s (MNR) Maintenance
of Way Payroll Unit (M of W Payroll) and LIRR Maintenance of Equipment (M of E)
Department’s Manpower Unit (Manpower) to leam about their timekeeping procedures and
practices.

• Most MNR employees use the Kronos system, which includes the older swipe time
clocks, for timekeeping purposes."^ According to MNR M of W Payroll, all represented
employees are required to record their shift start and end times using Kronos clocks.
MNR officials informed us that over 100 clocks are installed at various facilities, stations,
and trailers throughout MNR territory. Employees are required to clock in and out at
their headquarters, but under certain conditions are authorized to clock in and out at
locations closer to their work sites. Employees are required to use the clocks for both
their regular and overtime shifts.

In comparison to LIRR Engineering Payroll’s 19 staff members—who support about

2,100 employees—^MNR M of W Payroll has 12 staff members to process timekeeping
information for approximately 2,200 employees. These tasks include entering the pay
codes from the timesheets into the Kronos system, comparing the information reported on
the timesheets to the Kronos time-clock data for accuracy, and making adjustments as
appropriate. MNR M of W Pa3^oll also uses Kronos reports to determine whether
employees are clocking in and out and doing so at the appropriate locations. In addition,
M of W monitors the biometric clocks with cameras to allow for the visual verification of
employees’ clocking in and out, when necessary.

• LIRR M of E uses Kronos biometric clocks at approximately 70 locations to capture

employees’ start and end times on regular and overtime shifts. M of E Manpower
personnel use the clock data to validate employees’ work hours. Significantly, M of E
does not use paper timesheets or Labor Sheets to document work assignments; all payroll
information is captured and managed electronically. For example, M of E foremen enter
their employees’ daily work assignments by jobs and work description codes directly into

Train and Engine employees use the Crew Management System for timekeeping.
Phillip Eng
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August 7, 2019
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the Kronos system. Further, every week, the foremen are required to verify that the
Kronos work assignments and time-elock records are accurate before submitting them to
Manpower. Manpower then checks the time entries in the Kronos system to ensure that
the employees’ claimed overtime hours match the approved overtime shifts. Manpower
also periodically reviews Kronos reports to check for patterns requiring additional
scrutiny. Manpower officials told us they question M of E supervisors and managers
about any irregularities they identify through this monitoring process.

3. Supervision ofB&B Foremen is Insufficient

B&B foremen qualified as Pilots can be assigned to work at various locations, supporting the
work of LIRR and third-party contractors. We found that when assigned to Pilot duty on an
overtime basis overnight at West Side Yard (WSY), the foremen worked without supervision;
neither their immediate supervisors nor any other LIRR supervisors were present at the third
party contractor’s construction site. We also learned that the agency had not established a sign-
in or sign-out procedure at WSY to allow the B&B Pilots to document their arrivals and
departures. As a result. Engineering management could be said to rely on an “honor system” that
assumed the foremen would work their full assigned shifts and accurately report their time on the
Labor Sheets. Our review indicated that B&B supervisors approved the foremen’s Labor Sheets
without any assurance that all of the hours claimed were actually worked.

4. Employees Do Not Consistently Use Standardized Daily Labor Sheets

As noted above, in June 2015, Engineering issued revised timekeeping procedures and
documents, including a new Labor Sheet that all Engineering employees were directed to use.
This new Labor Sheet lists the various time reporting codes for employees to use when
completing their Labor Sheets, including the travel time code “TT”. However, despite the
official requirement to use the new Labor Sheet, our review revealed that Engineering employees
did not do so. Specifically, we found that B&B foremen continued to use older versions of the
Labor Sheet to report their time, as well as the time of other employees in their respective gangs.
As discussed in detail below, by not using the proper form—especially to report travel time with
code “TT”—employees could report ineligible travel time as work time, thereby inflating their
overtime and double-time earnings. When we discussed this with the Assistant Chief Officer,
she acknowledged that Engineering Pajroll had not enforced the department’s requirement and
indicated that her unit would start to enforce the use of the proper form.

B. Widespread Inappropriate Use and Documentation of Travel Time

As you may recall from the interim report (OIG Report # 2018-62), we received a different
explanation of the so-called travel time rule firom a B&B supervisor and an assistant supervisor
as compared to LIRR Labor Relations’ position on travel time. Labor Relations officials told us
that employees are only entitled to a maximum of two hours of travel time on regular shifts, paid
Phillip Eng
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August 7, 2019
Page 6

at the straight-time rate when reporting to and/or ending their regular shift at work locations
other than their headquarters (known as the Headquarters Rule). Additionally, travel time is not
to be considered time worked and does not apply to overtime shifts. Labor Relations distributed
guidelines governing travel time usage to the LIRR departments over 25 years ago, which M of
E has been following. The guidelines explain that travel time is considered a penalty payment to
compensate the employee when LIRR violates the Headquarters Rule. The guidelines also
specifically state that employees are not entitled to travel time for overtime assignments.

1. The Inappropriate Use of Travel Time

However, despite the apparent clarity of LIRR’s standards, a B&B supervisor, who is responsible
for approving Labor Sheets, and an assistant supervisor informed us that they believe B&B
employees are entitled to travel time at overtime rates during regular and overtime shifts away
from their headquarters. Therefore, they have been approving travel under that interpretation as
long as they have been in supervisory positions. As reported in the interim report, owing to this
incorrect application of travel time, B&B supervisors allowed employees to inappropriately
report travel time as time worked and using that time to claim overtime and double-time pay on a
routine basis. In that report, we estimated that the four B&B foremen who are also Pilots
received questionable payments of $20,176 for travel time when working overtime shifts at WSY
between April and Jxme 2018. When we expanded our review to estimate the use of travel time
claimed by the same four foremen for all of their regular and overtime shifts during that three-
month period, we determined that the questionable payments more than doubled to $41,341. We
estimated that these foremen could have received as much as $146,800 in questionable travel
time payments for 2018, which would represent 23% of the $650,836 in overtime paid to them
for the year.

2. Engineering Payroll Does Not Know the Amount ofPay Attributed to Travel Time
Because ofPoor Documentation

Engineering’s timekeeping guidelines provide specific instructions that travel time is to be

entered on the Labor Sheets using the code “TT”. However, B&B employees did not comply
with these instructions during the period of our review. Specifically, we found no instances in
which the travel time code “TT” appeared on a Labor Sheet, even though B&B supervisors
informed us that certain overtime hours added at the beginning and the end of an overtime shift
were, in fact, for travel time.

Significantly, Engineering management does not appear to have made efforts to enforce
employees’ compliance with timekeeping guidelines. When questioned, the ACO asserted that
Engineering Payroll has neither the authority nor the expertise to question the operating
departments’ decisions about overtime usage or interpretation of agency guidelines such as travel
time eligibility. She told us she assumed the extra hours that B&B employees added to the
beginning and end of their work shifts were for “early start” or “late leave” times, and she
Phillip Eng
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reiterated her belief that the Labor Sheets were accurate and valid because they had been signed
by the foremen and supervisors.

In addition to reviewing the time records of the four B&B foremen, we also analyzed payroll
data for 127 B&B employees and other foremen from April to June 2018 to determine whether
the appropriate time code was used to report travel time. Of the 127 employees, 99 of them (78
percent) exhibited patterns similar to the four foremen we reviewed initially, indicating that the
improper coding of travel time is a widespread practice in the B&B Division. Some of the
timesheets showed what appeared to be travel time ranging from one to four hours at the
beginning and/or end of regular shifts. While some of these hours may have been legitimate
travel time or overtime hours worked, classifying all of the hours outside of the regular shifts as
overtime makes it difficult to differentiate travel time from overtime worked. Consequently, this
increases the likelihood that hours that should be treated as travel time are instead paid at
overtime rates and also contributes to any double-time pay triggered by the work rule on shifts of
16 continuous hours.

In an effort to provide clarification we updated the recommendations in this report to be more

explicit regarding our expectations for agency action.

RECOMMENDATIONS

To ensure that there is accountability for employees’ time and attendance, including travel time,
we recommend that;

1. Engineering implement the use of Kronos biometric clocks to capture employees’ start
and end times for regular and overtime shifts.^

Agency Response: Agreed. LIRR expects to have all clocks installed by August 29, 2019
and draft biometric timekeeping procedures have been developed.

2. Engineering develop a standard overtime authorization form, including specific start and
end times, to clearly document the assignment of overtime. The completed forms must
be made accessible to all responsible supervisors, and should be submitted to Engineering
Payroll with the employees’ Daily Labor Sheets and used to verify hours actually
worked.

Agency Response: Accepted. “While supervisor and assistant supervisors assign

upcoming overtime work and record the names of employees approvedfor overtime, the
documentation used to record this information has been inconsistent across divisions of
the Department.... ” The Engineering department will roll-out a new “standardizedform

^ We understand that since our earlier version of this report was sent to you in May, 2019 (see Footnote 2), this is
already underway.
Phillip Eng
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to all disciplines by October 2019. This electronic form will clearly indicate the name of
the manager who audthorized the overtime, date, start and end times, type of work and
justification, location, an names of employees authorized to work. ”

3. Engineering hold Buildings and Bridges supervisors aceountable for verifying that
employees’ claims for travel time hours are claimed for at most one hour, charged only at
the employee’s regular pay rate, and claimed only for times when the employee is
directed by management not to report to or depart from the assigned headquarters for
their regular tours of duty but instead to go on and/or off duty at another location.

Agency Response: Pending. LIRR has engaged the “expertise of an independent third-
party firm with subject matter expertise to review the issue and provide guidance to LIRR
executive management in support ofnext steps. ” LIRR is committed to update the OIG
on the actons taken regarding time and attendance controls in 90 day.s

4. Engineering Payroll must continually analyze timekeeping data to identify questionable

time and attendance patterns (e.g. excessive continuous overtime hours or travel time that
is not recorded accurately).

Agency Response: Accepted. The Engineering Department will perform random reviews
of timekeeping data with a focus on the application of travel time on a periodic basis.

As always, we appreciate the courtesy and cooperation afforded to us at all times by members of
your staff. Should you have any questions, or need additional information, please contact me at
(212) 878-0007 or Executive Deputy Inspector General Elizabeth Keating at (212) 878-0022.

Very truly yours.

Carolyn Pokotny